Vol. 2 Issue 1, pp: (1-14), January 2017. Available online at: http://www.prudentjournals.org/IRJESS

Review

Ensuring Optimal Electricity Generation and

Supply: The Paradox of Nigeria’s Situation. Ali I. Naibbi1 and Yusuf M. Tukur2

1&2Department of Geography, Faculty of Social and Management Sciences, Northwest University,

Kano, Nigeria.

*Corresponding Author. E-mail: ali.naibbi@nwu.edu.ng

Received 01 November, 2016; Accepted 02 January, 2017.

Abstract

Electricity, being an important energy source is inadequate in Nigeria, and is mostly limited to a few

towns, while the rural areas are either underserved or neglected in terms of supply. This paper

examines various literatures on electricity generation and supply by focusing on the experience of

Nigeria, Africa's largest economy. The result reveals the continued insufficient electricity supply in

the country. The deregulation of the sector, which was aimed at facilitating efficiency in electricity

supply, did not provide much improvement in the supply as there was no significant increase in the

total generation output and access. The result further shows that the frequent power outage in the

country has a multiplier effect on the socio-economic activities at all level. It is recommended that

policies and measures needs to be emphasised to abate the sabotage in the sector. The study

concludes that a robust reform is required in the power sector that would holistically address the

problems.

Key Words: Electricity, Energy access, electricity generation, electricity supply, energy poverty.

INTRODUCTION

An estimate by the International Energy Agency

(IEA) indicates that over 1.3 billion people are

lacking access to electricity, of which some 600

million are living in Africa. In all developing

countries, people who lacked access to

electricity rely on biomass for thermal energy

(United Nations Development Programme

(UNDP), 2012). Nigeria is the most populous

country in Africa. Nearly 60 % of its population

have no reliable access to electricity from the

national grid and most people rely on lighting

with kerosene lanterns, candles and torch lights

(Deutsche Gesellschaft for

TechnischeZusammenarbeit (DGTZ), 2009).

The Nigeria‟s deplorable power generation,

transmission and the persistent failure across

the country has been one of the major concerns

currently making a wave all over the country.

While Nigeria is amongst the world leading oil

producers, the country is still battling to meet up

with its daily electricity demand, which affects all

sectors of the economy including the industrial,

agricultural, transport, services and the

households (Nigerian Electricity Regulation

Commission, (NERC), 2016). The most

vulnerable sector is the household because the

overwhelming majority of the households are

poor who are deprived access and security to

clean energy.

International Research Journal of Environmental Sciences and Studies Article Number: PRJA10630540 Copyright ©2017 Author(s) retain the copyright of this article Author(s) agree that this article remain permanently open access under the terms of the Creative Commons

Attribution 4.0 International License.

Despite privatizing the electricity supplying

sector and the deregulation of the fossil fuel

sector in recent times, both the electricity and

fossil fuel supplies are erratic in the country

(Naibbi & Healey, 2015). The provision of

electricity in the country is so low that the per

capita energy consumption is less than 150

Kilowatt (kWh) (ibid, p.47). Arising from the

erratic power supply from the national grid,

Nigeria‟s per capita electricity consumption is

four times less than the African average and 19

times less than the world‟s average. This figure

means that the country is far below the required

4,000kWh for achieving a decent standard of

human existence (UNDP. 2010). As at January

2016, the country‟s electricity generation stood

at about 4,200 Megawatts (MW) (NERC, 2016).

The Energy Commission of Nigeria (ECN) has

projected the electricity demand for Nigeria at a

conservative growth rate of 7% to increase to

about 50,820MW by 2020. Based on this

estimate, Nigeria will require an installed

capacity in excess of 60,000MW including

spinning reserve (Corporate & Public Affairs

Covenant University (CPACU), 2008).

Since steady electricity supply is a critical

enabler for economic growth and development,

it can be argued that the current trend of

insufficient and unreliable electricity supply in

Nigeria is part of the complex challenges

hindering food security, wealth creation, human

capital development and security of the nation. If

by the year 2020 Nigeria is to join the world's

twenty largest economies in Gross Domestic

Product (GDP) size as it claimed, it is important

to revisit its electricity generation strategy with a

view to understanding whether there is a

significant change from past situation or not,

which this study highlights. Thus, the aim of this

paper is to pull together literature from different

perspective and assess the electricity

challenges in Nigeria and situate the on-going

energy reforms in the country.

History of Electricity Generation and

Reforms in Nigeria

Electricity supply in Nigeria dates back to 1896

when it was first produced in Lagos by the

colonial administrators (Sambo, 2008). A central

body known as the Electricity Corporation of

Nigeria, now defunct, was later set up in 1950 to

act as the central body to develop and supply

electricity in the country (Akarakiri, 1999 &

Sambo, 2008). However, even at that time, other

bodies like the Native Authorities, the Nigeria

Electricity Supply Company (NESCO) and the

Niger Dams Authority (NDA) also had licenses

to produce electricity in some locations within

Nigeria (Sambo, 2008). While NESCO, for

example, is a private company that still exists

today in some areas of Plateau state in the north

western part of Nigeria supplying electricity to a

few towns and some industries in the state

capital (Jos) with a high degree of reliability, the

electricity produced by NDA (now defunct) was

sold to the Electricity Corporation of Nigeria for

distribution and sales to consumers (Sambo,

2008).

In 1972, the National Electricity Power Authority

(NEPA) was set up to take over the

responsibilities for generation and distribution of

electricity in the country from all existing

organisations (Akarakiri, 1999). As part of the

Federal Government‟s (FG) effort to address the

electricity issues, in 2005, the name NEPA was

changed to Power Holding Company of Nigeria

(PHCN). The PHCN which is a FG‟s parastatal,

supplies most of the electricity consumed in

Nigeria and supplemented with power generated

from privately-owned plants due to the

irregularity in the public power generation and

transmission. Similarly, the FG in 2012

privatised the PHCN generation and distribution

companies, and had handed over to the core

investors in 2013 (Anthony-Uko, 2013 & News

Agency of Nigeria (NAN), 2013). However, even

with these developments, the new investors are

complaining about the shortages of gas supply

to the generation companies (GENCOS), which

results to the continued drop in the electricity

supply observed across the country.

Nonetheless, what Nigerians are desperately

hoping to see is meaningful improvements in

their electricity supply as a result of these

deregulations.

The Conceptual Issues

Access to universal energy is conceptualised by

many as the proportion of people that use all

forms of clean fuels for cooking and other

Naibbi and Tukur 2

domestic activities. Legros et al. (2009) noted

that access to modern energy is measured as

the percent of people that make use of clean

energy sources including liquid, gaseous fuels

and voltage power as primary fuel to satisfy their

needs. Therefore, electricity access, which is the

focus of this paper, is measured as the

percentage of people that are connected to the

electricity grids at household level in a particular

geographical setting. Similarly, electricity

connection may differ by quantity in terms of

hours of availability per day; or quality related to

voltage and frequency; and use in relation to

light bulb to a wide range of end-uses (Legros et

al., 2009). In relation to this, the Sustainable

Energy Africa (SEA) (2014) posited that access

to electricity as a universal energy source should

be determined by two key factors; the number of

households connected to electricity- either

through the national grid or alternative sources

such as solar panels and power generators; and

the affordability of the electricity by the poor

households.

It should however, be noted that the concept of

universal access to clean energy that was

formally included in the millennium development

goals (MDGs), and currently included in the

sustainable development goals (SDGs), is still

under debate, with more focus on affordability.

For example, while some scholars like Kowsari

and Zerriffi (2011) who championed the concept

of the energy ladder emphasised that

households choose to move up the ladder to

cleaner energies as soon as they can afford to

do so, others argue on the contrary.

For example, Matsika et al. (2013) argued that

most countries in the developing world,

particularly in the sub-Saharan Africa, where

majority of the people lived below poverty line,

even if all the modern energy is provided, it is

difficult for some poor households to access

them. Furthermore, Matsika et al. (ibid) added

that poverty has made some rural communities

completely dependent on fuelwood in South

Africa, in spite of the presence of household

electricity connection at a subsidised price.

Moreover, most of the communities prefer to

invest their limited income in obtaining other

basic family needs, rather than investing in the

monthly tariffs of electricity. Matsika et al. (2013,

p.724), concluded that “providing an alternative

cooking fuel, like electricity in areas where

household incomes cannot accommodate these

additional costs will not immediately reduce the

burden of the majority of these households to

secure domestic energy services from the

environment”. Olise and Nria-Dappa (2009)

revealed that the costliest energy need in the

Sub-Saharan African (SSA) countries is

electricity where nearly 10-20 percent of the

poorest households‟ income of about 1-2 US

dollars per day may be spent on kerosene

lamps, stoves or candles.

Thus, it is also the position of this paper that the

idea of energy access is not just about the

percentage of households using one particular

energy source or the other, but rather, a wide

range of issues that determine the level of

accessibility which include availability, reliability

as well as affordability of the energy.

MATERIALS AND METHODS

The paper examines various literatures about

electricity generation and supply by focusing on

the experience of Nigeria. Figure 1 presents the

schematic overview of the method used in this

study. The study sampled more than 40 articles

both published and unpublished covering the

subject matter from different journal articles,

books and reports from various government

agencies and media organs. These information

were studied, and numerical data were

processed in both Microsoft Excel and GIS

environment for tables and graphic

presentations.

3 Int. Res. J. Environ. Sci. Stud.

Figure 1: Overview of Methodology

GOVERNMENT’S SPENDING ON ELECTRICITY GENERATION AND THE RESULTING

OUTPUT

George and Oseni (2012) argued that power supply is a critical production inputs that could be used

to address unemployment in an emerging economy like Nigeria, where market opportunities exist.

Unfortunately, despite the vast natural resources in Nigeria, its electricity demand far outweighs the

supply, which has hindered the country‟s development as evident by the widening trade imbalance,

collapse of big manufacturing companies, sharp increase in the cost of doing business and many

others (Oji et al., 2012). A brief discussion of the activities of FG from 1999 to 2015 in terms of

investment in the electricity sector is illustrated in figure 2.

Figure 2: FG Expenditure on Electricity from 1999 – 2015 in Billions of Naira

Source: Adapted from Nigerian Bulletin (2015)

Government/Non-Governmental Reports

1) Nigerian Bulletin 2) National Bureau of Statistics, (NBS) 3) Ministry of Power Nigeria (MPN) 4) Africa Development Fund (ADF) 5) International Energy Agency (IEA) 6) Transmission Company of Nigeria (TCN)

Data Handling Microsoft Excel

(Figures) GIS (Map)

Media

Reports

1) News Papers 2) Television News & Documentaries 3) News Agency of Nigeria (NAN)

Research

Articles

1) Journals 2) Books

Methodology

(Literature survey)

Discussion

Naibbi and Tukur 4

From figure 2, it can be argued that huge

investments have been made into the power

sector in Nigeria by successive Governments

since 1999. Between 1999 and 2014, about 1.56

Trillion Naira was allocated for improving the

electricity supply of the country. However, out of

this amount, only about 955 Billion Naira was

released by the FG, creating a deficit of about

609 Billion Naira between these periods. This

deficit of about 40% of the total allocation shows

the laxity of the government towards improving

the electricity generation in the country.

In spite of this spending over the years, Nigeria

with an estimated population of over 170 million

people only produces about 30 Watts of

electricity per person, while South Africa, with a

population of about 45 million produces 1,045.67

Watts of electricity per person (CPACU, 2008). In

other words, for Nigeria to compete with South

Africa in terms of electricity access, it require a

capacity development of over 146, 400 MW. This

indicates that even if the projected estimated of

60,000 MW was achieved by the year 2020; it

can only reduce the problem but certainly not fully

adequate enough for the country‟s needs

Electricity Access in Nigeria

Nigeria being the largest economy in Africa has

all the potential renewable resources that can be

harnessed to develop alternative energy source

that can ensure access to clean fuels for all.

However, the per capita electricity consumption in

Nigeria is one of the lowest in SSA and stood at

about 120 kWh (ADF, 2013). Even though,

several attempts have been made to develop the

sector through policies and reforms, the level of

development of the existing energy infrastructure

does not match the country‟s electricity need.

Sambo (2008) indicated that before 1999 (the

end of military rule in Nigeria), the power sector

did not witnessed any substantial investment in

terms of infrastructural development and the

existing ones were not properly maintained. For

example, in 2001 when the then government

showed a commitment towards electricity

generation and engaged in a thorough

investigation of the sector, electricity generation

was discovered to have declined down from the

installed capacity of about 5,600MW to an

average of about 1,750MW, compared to the

national generating capacity of 6,000MW at the

time. It was further discovered that only 19 of the

79 installed generating units were functioning at

that time (Sambo, 2008).

This lack of expansion of the sector has hindered

its progress. For example, the World Bank in

2010 puts the electrification rates for Nigeria at

about 50%, which shows that more than 90

million people have no access to electricity (Africa

Development Fund (ADF), 2013 & International

Energy Agency (IEA), 2013), and therefore, have

to rely heavily on wood fuel for their daily energy

needs resulting in massive deforestation

(Gatugel&Serkan, 2014). Similarly, those with

access to electricity face load shedding,

blackouts, and therefore, have to rely on their

private power generators. Although, the situation

varies from one geopolitical zone to another (see

figures 3 & 4), it has been observed that

inaccessibility of electricity in the country is more

severe in the northern parts.

Figure 3: Percentage of households without electricity access in the different geo-political zones of Nigeria

Data Source: Adapted fromNational Bureau of Statistics (2009)

5 Int. Res. J. Environ. Sci. Stud.

Figure 4: Households without electricity access in the different States of Nigeria

Data Source: Adapted fromNational Bureau of Statistics (2009)

From figures 3 and 4, it can be observed that

the North-East has the highest percentage

with about 72% of its households unable to

access electricity. However, it should be noted

that the North East zone, has consistently

been disadvantaged in terms of poverty and

education in Nigeria since 1980 (UNDP, 2009,

p. 63). The situation is the same with the level

of unemployment in the country (Eroke, 2012),

which again shows the North-East to be

disadvantaged. Based on these indices, it can

be argued that the current situation of

insecurity in the North-East zone of the

country fostered by Boko Haram (refer to

Amnesty International, 2012), can be

attributed to the long term social injustice in

the region. Other problems related to social

issues that are considered to be responsible

for the unannounced load shedding, prolonged

and intermittent outages, which most

consumers of electricity in Nigeria have had to

contend with over the years, can be

summarised from the Nigerian National

Bureau of Statistics, (NBS) (2010) as follows:

a poorly-motivated workforce, vandalism and

the theft of cables and other vital equipment,

accidental destruction of distribution lines,

illegal connections that resulted in over-

loading of distribution lines, and non-payment

of bills by the consumers. The combination of

these problems has resulted in the deplorable

state of electrical power supply in the country

(Otuchikere, 2013).

Electricity and Socio-Economic Development

in Nigeria

Electricity being one of the cleaner and most

widely used sources of power is known to play

a significant role in the advancement of the

standard of life, which is why the electricity per

capita consumption has a strong correlation

Naibbi and Tukur 6

with national GDP. National Bureau of

Statistics (NBS) (2014) showed that the

electricity generation, transmission and

distribution account for less than one per cent

of Nigeria‟s GDP. From this figure, it can be

argued that electricity constitute a small

economic activity in Nigeria in relation to her

size and population. Development indices

have shown that the provision of adequate grid

electricity will transform Nigeria's economic

prospects and provide more and better jobs to

millions of Nigerians. For example, the

Government in 2012 gathered that without

investment and reform in the power sector, the

estimates of the annual lost in economic

growth could be as high as US$130bn or 50%

of Nigeria's 2012 GDP (Adam Smith

International, n.d). The Government realised at

that time that the provision of needed

electricity could move the nation forward, while

its shortage has become an obstacle to

businesses as it increases the cost of doing

business, business risk and uncertainty of

investment. Indeed, electricity is not just an

intrinsic aspect of development, but also an

essential prerequisite for sustainable

development since no meaningful socio-

economic growth can be attained without it

(CPACU, 2008). Ayara et al. (2013)

maintained that electric power is the most

limiting factor to major business obstacle,

social activities as well as telecommunication

services in SSA.

Similarly, the impact of electricity shortage on

the education sector in Nigeria is becoming a

threat to the entire system. Presently, most

educational institutions in the country could

not access electricity for up to six hours daily,

which has continued to affect the performance

of research, teaching and learning process.

Also, electronic media aids and other teaching

facilities could not effectively be utilised as a

result of this. Even though, critical reforms

that would enable Nigeria overcome its huge

deficit in electricity supply through private

sector capital investment have been initiated;

unless it is fully achieved, the economic

prosperity of the country cannot be fully

developed.

Deliberate Sabotage, Corruption and

Vandalization of Electricity Installations

Electricity generation in Nigeria is marred by

excess capacity and inadequate supply (NBS,

2014). NBS noted that the peak demand is

often about one-third of the installed capacity

because of poor maintenance. The

infrastructural decay of the sector has ever

been emphasised as the major problem

confronting Nigeria‟s electricity generation

(Asaolu&Oladele, 2006). For example, prior to

the advent of hydro-generated electricity from

the Kainji Power Station in the early 1970s,

electricity supply in the country was largely by

the thermal system. However, by the late

1970s and early 1980s, the hydro system

started giving way to the thermal dominated

system again (NBS, 2014). This was largely

due to the perennial water-flow problem of the

River Niger at Kainji, escalating costs of

establishing hydro-plants and their long

gestation lags (NBS, 2014). Presently, the

sources of Nigeria's electricity shows that

about 65% was from fossil fuel, 33% was from

hydro, 1% from biomass and waste and <1%

from wind.

The poor state of electricity supply in Nigeria is

complicated by the frequent sabotage and

vandalism of energy infrastructure. For

example, the re-emergence of Niger Delta

Avengers (NDA) in the Niger-Delta region after

the 2015 general election has worsen the

electricity generation in Nigeria to the extent

that many parts of the country have been

experiencing total blackout for days as a result

of intensification of petroleum pipeline

vandalism, attacks on oil facilities and frequent

system collapses. This was highlighted by an

electricity reporter, Juliet Alohan, of the

Leadership Newspaper of Nigeria on 13 th July,

2014 when she writes on the implications for

efficient and reliable electricity delivery to

Nigerians entitled “Ending Sabotage in Power

Sector”. She showed in the report that “the

emerging Nigerian Electricity Supply Industry

(NESI) is faced with many challenges: these

include inadequate supply of gas to power

plants, aged and outdated infrastructure and

the huge capital infusion requirement to drive

the sector”.

7 Int. Res. J. Environ. Sci. Stud.

Alohan (2015) noted that both the then

Federal minister of power, Prof. Chinedu Nebo

and his State minister counterparts,

Mohammed Wakil in 2014 declared that the

challenge in the sector can be described as

another form of “infrastructural terrorism”. Prof.

Chinedu Nebo highlighted that most of their

pipelines that supply gas to the power

generation stations were constantly under

attack, which results in a loss of about

2,000MW of electricity annually. For example,

complaining about the situation, Prof. Nebo

said the “Trans Niger line is frequently

vandalised for bunkering at least twice every

month resulting in about 500MW loss, to

mention a few”. Mohammed Wakil maintained

that the current situation is an organised

sabotage of government installations without

economic motive. He posited that “while the

vandalism has become rampant in the oil

sector for economic gains, the motive for

attacking the power sector assets cannot yet

be ascertained, other than for pure sabotage,

as gas cannot be stolen”(Alohan, 2014). He

therefore concluded that “it cannot be a

coincidence that it is when the power sector is

moving to climb above the 4,000MW level that

the so called sabotage intensifies to draw us

back”.

Also, in his address to the press in April, 2015,

the Permanent Secretary Ministry of Power,

Mr. GodknowsIgali, added that power

generation in the country had dropped to

about 2,800MW from a recent peak of

4,500MW in the first quarter of 2015 as a

result of vandalism of gas pipelines along the

Escravos pipeline route in the Niger Delta

(Ministry of Power Nigeria (MPN), 2015).

Subsequently, in his address during a meeting

with the former Vice-President of Nigeria,

MrIgali raised an alarm over the worsening

power generation across the country which

further dropped from the 2,800 MW in April,

2015 to 1,327 MW in May 2015 (MPN, 2015).

This recurrent pipeline vandalism in the

Nigeria‟s Niger Delta region was also

emphasised by the present Minister of Power,

Works and Housing, Baba Tunde Fashola in

January, 2016 as one of the major challenges

facing the power generation to the National

Grid. Estimate has shown that between

February and July, 2016, militants have

destroyed about 34 gas pipelines across the

Niger-Delta states since they renewed attacks

on national assets, which result to acute

shortage of gas to electricity generation

companies. About 25 thermal power stations

are currently experiencing a shortage of gas

supply. The increasing attacks by NDA have

halted the plans by NNPC to make more gas

available to the power stations. Furthermore,

frequent system collapses in the sector is

another source of worry for the stakeholders

as statistics shows that the national grid has

recorded about 21 times power collapses

between February and July, 2016 (Nigerian

Bulletin (NB), 2016).

Following the unprecedented low electricity

generation in May 2015, Nigeria‟s generation

has improved from 1,327MW to 4,748MW with

an operational capacity of 3,879MW in August

2015 (Advisory Power Team, 2015 &

Transmission Company of Nigeria (TCN),

2015). The Management of TCN, in Nigerian

Bulletin news of August 25th, 2015, reported

that the achievement was as a result of the

joint contributions of the gas companies,

generation companies, distribution companies

and the TCN. Comparatively, this operational

capacity of 3,879MW generated is far below

the required electricity that will sustain the

country‟s population of over 170 million people

as compared to 40, 000MW required to sustain

the basic needs of such population (UNDP,

2010). Certainly, between four and five times

increase in the present electricity consumption

in Nigeria is required to match peer countries

with similar GDP per capita (Advisory Power

Team, 2015). Table 1 presents Nigeria‟s

power generation efficiency, which highlighted

the installed capacity of the existing

generating power plants. The table also shows

the reduced capacity due to maintenance and

repair issues as well as reduced power

generation due to various constraints.

Naibbi and Tukur 8

Table 1: Nigeria‟s Power Generation Efficiency**

1) Available Generating Plants Installed Capacity Total Installed

3 Hydro Plants 1,930MW

12,522MW

22 Gas Plants 10,592MW

Total Installed Capacity 12,522MW

2) Reduced power generation due to

Maintenance & Repair Issues

Reduced Capacity Available Capacity

Reduced Capacity of 21 Plants 5,381MW 7,141MW

Total reduced capacitydue to maintenance &repair issues 5,381MW

3) Reduced power generation due to constraints Reduced Capacity Operational Capacity

Gas Constraint 1,995MW

Water Constraint 444MW

High Frequency 179MW 3,879MW

Line Constraint 84MW

Other Constraints 560MW

Total reduced power generation due to constraints 3,262MW

** Available and operational capacity data points are daily averages from January to 15 August 2015

Source: Adapted from Advisory Power Team (2015).

From Table 1, only about 25% of the potential installed electricity capacity reaches the end-user,

which can be argued that, the structural inefficiencies in the power generation cause the under-

utilization of Nigeria‟s generation capacity. Certainly, for the electricity generation in the country to

attain its maximum potentials, the installed capacity has to be fully achieved while measures should

be put in place to curb gas pipe vandalism to minimise the incidents of wastages between the points

of power generation and distribution. The good news is that, the present Government is working

hard to rescue the sector as noted by President Muhammadu Buhari –“that Nigeria had everything it

takes to generate enough power” (News Express, 2015). The President, who said this in a question

and answer interaction with the Nigerian community in Tehran, the Islamic Republic of Iran, noted

that “although some improvement in power had been recorded in the recent period,” sabotage of

pipeline installations continues to be a problem. He gave the assurance that the Military task-forces

with representation from the Army, Navy, Air Force, the Police and the secret services will be

reconstituted to secure the pipelines (News Express, 2015).This measure could be the reason why

the Government announced an improvement of the supply to a record high of 5,035 MW on

February 2nd, 2016 (Alohan, 2016). However, the sustainability of this record in the long run is in

doubt giving the huge challenges. It is therefore not surprising that the supply dropped by about

1,647MW on March 2nd, 2016 (Channels TV, 3rd March, 2016) and a record low of 0MW for about

four hours in the early hours of 1st April, 2016 (Channels TV, 2nd April, 2016).

THE WAY FORWARD

Privatization and Withdrawal of Subsidy as a Means of Addressing the Problem

As part of the ongoing energy reform, Nigeria‟s energy provider, PHCN, was privatised and formally

handed over to the private sector on 1st October, 2013. The major issues that prompted

Government‟s decision to take this radical action include among others; persistence power outages

and unreliable service. As part of the reform, the Government enacted the 2005 Electric Power

Sector Reform Act (EPSR Act), which called for the disintegration of the national power utility

company into a series of 18 successor companies: six generation companies, 11 distribution

companies (DISCOS) covering all 36 Nigerian states, and a national power transmission company.

9 Int. Res. J. Environ. Sci. Stud.

Table 2 shows the 11 DISCOS, their geographical

locations, variation of customers and network

distribution as well as the total energy allocated to

each DISCO.

NERC and the Bureau of Public Enterprises (BPE)

were mandated to monitor the operations of the

successor companies and sanction any core

investor that does not deliver on the performance

agreement made with the government (Izuora,

2014). As a result of this development, the role of

Government in the sector under PHCN is more or

less that of generation, while the transmission is

shared amongst the DISCOS that bought the

company.

From Table 2, the resulting distribution companies

vary greatly in terms of network size, number of

customers and geographic area, which also affects

the allocation of the energy. Based on the

agreements with the Bureau of Public Enterprises

(BPE), each distribution company is “allocated” an

amount of grid energy. In reality, supply varies with

some distribution companies receiving more and

others less, which is often driven by the ability of

the individual distribution company to accept the

offered capacity (Advisory Power Team, 2015).

It should however be remembered that all the

regulations made in the last two decades to

address the issues of the power sector proved

abortive. For example, the commercialization and

privatization decree No. 25 of 1988, which was

aimed at addressing the acute power shortages at

the time, did not yield the desired result due to the

inability of the Government to fully implement the

reforms (Onakoya et al., 2013). Therefore, it is the

position of this paper that unless the Government

act positively, even the present privatisation

exercise will not achieve the desired outcome as

expected.

Table 2: Geographical Locations of Distribution Companies (DISCOS) and their Characteristics

Location

Variation of Customers &

Network Distribution

Allocated Energy**

(% of Total Energy Allocated)

DISCOS

Geographical Location

(States Coverage)

Number of

Customers

(„000, 2014)

Distribution

Network

(Km, 2008)

Allocation

(% of Grid

Energy)

Actual Average

(Jan. 204-Apr.

2015)

Abuja North Central (FCT, Niger &Kogi) 755 107,254 12% 15%

Benin South- South (Delta,Edo, Ekiti& Ondo) 1,187 104,702 15% 14%

Eko South West (Lagos) 581 8,093 13% 13%

Enugu South East (Abia, Anambra, Ebonyi, Enugu & Imo) 819 25,078 9% 12%

Ibadan South West (Kwara, Ogun, Osun & Oyo) 1,750 24,355 9% 11%

Ikeja South West (Lagos) 1,128 12,466 11% 9%

Jos North Central (Bauchi, Benue, Gombe, Nassarawa& Plateau) 466 12,227 8% 8%

Kaduna North West (Kaduna, Kebbi, Sokoto&Zamfara) 459 26,653 7% 7%

Kano North West (Jigawa, Kano &Katsina) 598 21,041 6% 5%

Port Harcourt South- South (Akwa Ibom, Bayelsa, Cross River & Rivers) 557 17,989 8% 5%

Yola North East (Adamawa, Borno, Taraba &Yobe) 345 6,505 4% 2%

** Due to rounding, percentages do not add to 100%

Source: Adapted from Advisory Power Team (2015).

Naibbi and Tukur 10

Billing System and Tariff Increment

Nigeria's power sector has high energy losses

from generation to billing, a low collection rate

and low access rate by the population (Obadote,

2009). Overall, there is insufficient cash

generation because of the numerous ineptitudes

in the sector. Obadote (2009) and Advisory

Power Team (2015) noted that the power sector

is heavily reliant on fuel subsidies and funding of

capital projects by the government.

Unfortunately, while the Government continued

to expend annually in order to meet the ever-

increasing demand, more than 55% of Nigerians

have no access to electricity and the supply to

those provided is not regular (AdvisoryPower

Team (2015). Advisory Power Team (ibid) noted

that majority of Nigerians get a significant

portion of their electricity from private generators

at a higher cost (NGN 62 - 94/kWh) than grid-

based power (NGN 26 - 38/kWh).

As highlighted in the preceding sections, there

were many policies in place to tackle the

problems; however, the billing system and the

huge subsidy in the sector by the Government

continued to present further challenges. One of

such issues can be viewed in the recently

withdrawal of such subsidy and the introduction

of an increased in the electricity tariff by about

70% commencing March, 2016. However, the

decision was not implemented as it was halted

by a court order in February, 2016 and a

nationwide labour strike that followed to

challenge the decision. While the decision as

claimed by the relevant authorities would help in

improving the electricity supply in the country,

this study also opined that it is unnecessary now

given that there was no significant improvement

in the power supply to warrant the increment.

Also, there was no significant improvement in

the provision of electricity reading metres to the

customers by the DISCOS, which results to the

continuation of the „business as usual‟ practice

of issuing customers with fixed charge rates of

inflated figures.

POLICY IMPLICATIONS, CONCLUSIONS

AND RECOMMENDATIONS

Policy Implications

Nigeria‟s inability to fully address the trend for

affordable and accessible electricity will be

severely tested in the coming decades as

DISCOS take full responsibilities of the

distribution to the customers. Despite the huge

capital injected into the power sector over the

years, Nigeria as the largest country in Africa in

terms of human, economy and natural resources

could not generate up to 6,000MW to its

National grid. Today, the country is struggling to

maintain 4,000MW production in the first quarter

of 2016.

There is no doubt that the deplorable power

generation has imposed serious socio-economic

hardship with its resultant negative

consequences. Public and private enterprises as

well as individuals suffer major setback, which

affect the productive sectors of the economy.

While electricity generation in Nigeria is the

lowest compared to countries like South Africa,

Egypt, Libya and Morocco in the continent,

South Africa for example, which already

generates about two-thirds of the region‟s

electricity, is making efforts to increase about

15,000MW to its national grid through coal-fired

power stations (Power Africa, 2015). The figure

if realised, would be higher than what the rest of

SSA produced now. Ethiopia on the other hand,

is building Africa‟s largest hydroelectric and

geothermal plants. Similarly, Kenya is drilling

holes deep into the Rift Valley in Hell‟s Gate

National Park to build what will eventually be the

world‟s largest single geothermal plant (Power

Africa, 2015). Again, in Kenya, at the Lake

Turkana, a particularly windy spot farther north

in the Rift Valley, private investors are building

Africa‟s biggest wind farm.

This suggests that, while Nigeria continued to

improve the quality of its existing dilapidated

electricity generation infrastructure, there is also

the requirement for the country to look inward for

other alternative sources of electricity as the

case of South Africa, Ethiopia and Kenya. This

paper suggests for an improvement in the

installed capacity of electricity generation in

Nigeria, which may potentially avert the use of

power generator sets as alternatives to

electricity source. Otherwise, industries that

cannot coup, as the case now in most cities of

Nigeria, would continue to move their production

lines to other favourable economies. Therefore,

adequate attention to improving alternative

11 Int. Res. J. Environ. Sci. Stud.

power generation and supply sources is

paramount in the country‟s electricity reform

strategy, which should focus on alternative

energy sources such as coal, wind turbines, bio-

fuels and solar.

Conclusions

Considering the size and financial allocation

injected into Nigeria‟s power sector since 1999

and the current electricity generation in the

country, which fluctuates between 3,500 MW

and 4,748MW, it is obvious that there is

enormous task ahead of the country if it „really‟

want to join the race, and be part of the league

of the top 20 leading economies of the world by

2020 as it claimed. This paper discovered that

corruption is one of the major bottlenecks that

plunged the country‟s power sector into the

present situation rather than factors such as

population growth. Other factors responsible for

the present state of electricity in Nigeria include

lack of diversification of energy sources and

decentralization of power generation and

distribution, poor development and maintenance

of the existing energy infrastructure, ineffective

private sector participation, deliberate sabotage

(„infrastructural terrorism‟) and negative attitudes

of consumers towards offsetting their monthly

bills.

As highlighted earlier, in order to end the over

aged electricity deficit in Nigeria, the country

should be willing to harness its enormous

resources (both human and material resources)

and ensure adequate utilization of both

resources. This will help the country to achieve

its potentials and compete with the rest of the

world. Also, Nigeria is located within the tropics

and geographically placed in an advantageous

region (best potential sites for wind, solar and

hydropower) to generate the needed electricity

for its National grid.

Recommendations

Given the high cost of power from diesel

generators as well as the high rate of pipeline

vandalism, renewable energy can be an

attractive alternative. Also, many of the Nigeria‟s

energy-related problems require not only

technological improvements, but also changes in

consumer behaviour to focus more on efficient

and sustainable practices by paying their bills on

time and avoid vandalization of the installed

facilities (illegal tapping and poor connections).

This could be achieved through public

enlightenment campaign and the enforcement of

legislation that will prevent these practices.

Similarly, corruption must be fully eradicated as

it is the major threat to the power sector since

time immemorial. Now that the FG is more

focussed „than ever‟ on tackling corruption at all

levels in the country, it is hoped that the

misappropriated allocation in the sector would

be recovered and injected back into the

organisation as seen in the case of arms deals.

Also, the provision of modern smart-metering or

prepaid metres to all households across the

country will help to prevent revenue loss and

illegal tapping. This was of course part of the

agreement reached between the DISCOS and

NERC before their take off. However, this still

remained a mirage as customers continued to

complain about „crazy bills‟ (estimated bills).

Overall, the situation of Nigeria‟s electricity

sector is perceived to change in the future if the

new investors (DISCOS) are able to invest more

into the sector, and the Government show

serious commitment towards diversifying the

energy sources, maintenance of the existing

electricity facilities, the natural gas supply to the

generating power stations, and decentralizing

the transmission and distribution networks.

Therefore, it is the position of this paper that a

paradigm shift is needed in the existing

approach to energy planning and policy

implementation in order to facilitate access to

cleaner and modern forms of energy in the

country.

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